Which of the following events is most likely to cause the investment share line to shift to the right?
A)The release of a government report demonstrating that new computer equipment will lower future business costs
B)A decrease in the investment tax credit
C)A rise in real interest rates
D)An increase in pessimism
E)A decline in interest rates

Question

Quizplus · Accepted Answer

The release of a government report demonstrating that new computer equipment will lower future business costs is likely to encourage businesses to invest more in new technology, shifting the investment demand curve to the right. This is because the expectation of lower future costs and potentially higher productivity makes investment more attractive.

Which of the Following Events Is Most Likely to Cause